Guotou Securities·2024-10-30 00:23Investment Rating - The investment rating for the company is "Buy - A" with a target price of 49.19 CNY, maintaining the rating [3]. Core Insights - The company's performance shows a gradual recovery, with a year-on-year decline in revenue of -2.91% for the first three quarters, an improvement from -3.09% in the mid-year report. The net profit attributable to shareholders decreased by -0.62%, improving from -1.33% [1]. - In Q3, the net profit attributable to shareholders increased by 0.79% year-on-year, driven by scale expansion and cost savings, although the net interest margin contracted [1][6]. - The bank's asset quality remains stable, with a non-performing loan ratio of 0.99% in Q3, reflecting a controlled credit risk environment [7][22]. Summary by Sections Financial Performance - Revenue for the first three quarters declined by -2.91%, while the pre-provision profit decreased by -2.66%. The net profit attributable to shareholders showed a smaller decline of -0.62% [1]. - In Q3, the bank's net interest margin was 1.97%, down 14 basis points year-on-year, with a slight quarter-on-quarter decrease of 2 basis points [2][3]. Credit Structure - New credit in Q3 amounted to 261 million CNY, a decrease of 844 million CNY year-on-year, primarily due to a significant reduction in bill discounting [2]. - General loans increased by 506 million CNY year-on-year, mainly driven by growth in corporate loans directed towards manufacturing, electricity, and wholesale retail sectors [2]. Deposit Growth - The bank saw a strong deposit growth in Q3, with new deposits of 115.6 billion CNY, an increase of 82.7 billion CNY year-on-year, outpacing credit expansion [2][3]. Non-Interest Income - Non-interest income in Q3 decreased by 5.7% year-on-year, with net fee and commission income down by 12.9% [6][19]. Cost Management - The cost-to-income ratio improved to 29.2%, down 3.1 percentage points year-on-year, benefiting from reductions in employee and business expenses [7][21]. Asset Quality - The non-performing loan ratio remained stable at 0.99%, with a slight increase in the attention rate and a decrease in the overdue rate [7][22]. - The bank has maintained a high provision level to mitigate risks, with a non-performing loan generation rate of 1.01% in Q3 [8][25]. Future Outlook - The bank's revenue growth is projected to be -2.62% for 2024, with a net profit growth of 0.2%, indicating a cautious recovery [10][9].